12 TH ANNUAL MEMBERSHIP MEETING MARCH 22, 2018

Transcription

1 12 TH ANNUAL MEMBERSHIP MEETING MARCH 22, 2018

2 CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION This presentation contains financial information for the first quarter of the fiscal year ending September 30, 2018 which have not been audited and have been derived from our unaudited books and records only. This means that the financial results for the period have not been independently reviewed by a certified public accountant and there is no assurance from a qualified, independent, third party that the assumptions and other information underlying the financial results is reasonable. Further, this presentation contains forward looking statements that can, in some cases, be identified by the use of words such as "may," "will," "should," "anticipate," "believe," "expect," "plan," "future," "intend," "could," "estimate," "predict," "hope," "potential," "continue," or the negative of these terms or other similar expressions. These statements are only our predictions and involve numerous assumptions, risks and uncertainties, including those referenced in our fiscal 2017 Form 10-K, 10-Q and other filings with the SEC which are specifically incorporated by reference herein. Our actual results or actions could and likely will differ materially from those anticipated in the forward looking statements.

3 AGENDA Welcome Introductions Recognition of Quorum Secretary Report Call Meeting to Order Voting Business Presentation Election Results Meeting Adjourn

4 RED TRAIL ENERGY, LLC Chairman Sid Mauch Governors Mike Appert, Vice Chairman / Chairman of Risk Management Committee Ambrose Hoff, Secretary Ron Aberle, Chairman of Audit Committee Frank Kirschenheiter Anthony Mock Bill Price Advisor to the Board of Governors Phil Gisi Chief Executive Officer Gerald Bachmeier Chief Financial Officer Jodi Johnson

5 INTRODUCTIONS Inspector of Election and SEC Legal Counsel Brown Winick Joe Leo Independent Auditor Eide Bailly Ann Glenz Qualified Matching Service Manager FNC Ag Stock, LLC Jayson Menke

6 INTRODUCTIONS Renewable Products Marketing Group, LLC Steve Dietz Jim Montbriand US Bank John Lundby Twin Rivers Trading Jason Schwab EERC Edward Steadman

7 RECOGNITION OF QUORUM Quorum is constituted as of the Record Date, when 41,466,340 Class A Membership Units were outstanding. The presence of members holding a majority of the total outstanding membership units constitutes a quorum. We need 20,733,170 Membership Units represented at the meeting to constitute a quorum. If you submitted a properly executed proxy, then you are considered part of the quorum even if you are not physically attending the meeting.

8 SECRETARY REPORT

9 RTE BALLOT Proposal #1 Election of Governors Mike Appert William Price Proposal #2 Approval of First Amendment to the Amended and Restated Member Control Agreement Proposed by the Company

10 VOTING

11 MANAGEMENT UPDATE Chief Executive Officer Gerald Bachmeier

12 RTE EMPLOYEE INTRODUCTIONS Juanita Aase Chris Kline Kent Glasser Rachel Helling Derrick Jellesed Tyler Mock Mike Samuelson Bill Schimetz Stacy Wagner Ryan Wiege

13 YEAR IN REVIEW Production Results: FYE 2017 FYE 2016 Ethanol Sold (gallons) 62,500,281 60,616,099 Dried Distillers Grains Sold (tons) 107, ,780 Modified Dried Distillers Grains Sold (tons) 98,631 80,659 Corn Oil Sold (pounds) 16,735,020 14,820,193 Corn Ground (bushels) 21,994,786 21,768,549 Production Yield

14 PRODUCTION INPUTS BTU per gallon KW per gallon Chemical cost per gallon

15 Ethanol Price Corn Cost Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18

16 CAPITAL PROJECTS COMPLETED IN 2017 Cooling Tower upgrade $356,000 Hammermill #4 $337,000 Molecular Sieve Beads $207,000 Beer Mash Expansion $57,000 Corn Oil Centrifuge Upgrade $42,000 E85 Blend Pump $24,000

17 10 YEAR MAINTENANCE COMPLETED IN 2017 American Petroleum Institute 653 Tank and Critical Piping Inspections Replaced the denaturant tank floor Replaced the valves on Sieves Replaced the valves on the fermentation header Decommissioned the ammonia tank Made repairs to the corn receiving system Replaced all slide gates Upgraded the transfer conveyors Upgraded the centrifuge to a new slotted scroll Replaced the DDG transfer piping

18 CFO REPORT

19 INCOME STATEMENTS Fiscal year ended September 30, 2017 Fiscal year ended September 30, 2016 Revenues $109,609,359 $105,159,602 Cost of goods sold $102,061,933 $97,414,865 Gross profit $7,547,426 $7,744,737 General & admin expenses $2,382,272 $2,399,733 Operating income $5,165,154 $5,345,004 Interest & other income $3,212,724 $673,341 Interest expense ($13,028) ($114,584) Net income $8,364,850 $5,903,761

20 COST PER GALLON OF ETHANOL PRODUCED FY 2017 Cost per Gallon FT 2016 Cost per Gallon Chemicals & Ingredients Denaturant Cost Electricity Water Natural Gas Labor Expense Operating Supplies Repairs & Maintenance Equipment Lease Depreciation

21 BALANCE SHEETS (AS OF SEPTEMBER 30) Total Assets $80,702,120 $75,591,411 Total Liabilities $7,023,359 $7,938,227 Members Equity $73,678,761 $67,653,184 Debt to equity ratio Book value per unit $1.78 $1.69

22 TAXABLE INCOME PER UNIT VS DISTRIBUTION PER UNIT Taxable Income (Loss) Per Unit Distribution per Unit $0.80 $0.70 $0.60 $0.50 $0.80 Since CY2013 Total Net Income per Unit = $1.32 Total Distribution per Unit = $ % $0.40 $0.35 $0.30 $0.22 $0.20 $0.10 $- $0.11 $0.12 $0.14 $0.05 $0.10 $0.07 $0.05 $- CY2012 0% CY % CY % CY % CY % CY % $(0.10) $(0.20) $(0.30) $(0.26)

23 INCOME STATEMENTS (THREE MONTHS ENDED DECEMBER 31) Revenues $26,122,856 $30,004,460 Cost of goods sold $27,822,261 $27,127,930 Gross profit (loss) ($1,699,405) $2,876,530 General & admin expenses $715,911 $690,934 Operating income (loss) ($2,415,316) $2,185,596 Interest & other income $430,660 $586,381 Interest expense ($10) ($15) Net income (loss) ($1,984,666) $2,771,962

24 FY 2018 Prices FY 2018 Sales FY 2018 Revenue Ethanol (gallons) $ ,627,106 $19,605,173 DDG (tons) $ ,963 $3,780,297 MDG (tons) $ ,506 $1,750,269 Corn Oil (pounds) $0.28 3,117,040 $869,357 Corn ground (bushels) $3.26 5,720,943 $18,678,133 FY 2017 Prices FY 2017 Sales FY 2017 Revenue Ethanol (gallons) $ ,202,835 $24,322,468 DDG (tons) $ ,625 $3,095,866 MDG (tons) $ ,122 $1,306,025 Corn Oil (pounds) $0.27 4,413,620 $1,180,190 Corn Ground (bushels) $3.54 5,687,614 $20,145,604

25 BALANCE SHEETS December 31, 2017 September 30, 2017 Total Assets $86,105,495 $80,702,120 Total Liabilities $14,411,400 $7,023,359 Members Equity $71,694,095 $73,678,761 Debt to equity ratio Book value per unit $1.73 $1.78

26 LOOKING AHEAD CO2 Sequestration Cogen Rail Expansion Cooperative Structure

27

28 NEWSLETTER AND MEMBER UPDATES You can receive your newsletter electronically - Sign up at the registration table. Please update your address and phone number at the registration table. Our goal is to keep the shareholder records as accurate as possible. Also, please let us know if you are a snowbird. Sign up for Red Trail Energy stock trading updates at Fncagstock.com/#/companies/RTE

29 Q & A

30 ELECTION RESULTS

31 ELECTION RESULTS Proposal #1 Election of Governors Election of Mike Appert Votes For 26,113,942 Votes Against - 0 Election of William Price Votes For 24,125,610 Votes Against - 0

32 ELECTION RESULTS Proposal #2 Approval of First Amendment to the Amended and Restated Member Control Agreement Votes For 25,862,584 Votes Against 827,250 Abstain - 0

33 ADJOURNMENT OF MEETING

34 THANK YOU FOR COMING!